Cryptocurrency recognised as property, rules Madras High Court

The judgment marks a crucial step toward providing legal clarity on cryptocurrency ownership, potentially influencing future decisions on taxation, inheritance, insolvency, and contractual disputes involving digital assets

In a landmark judgment that could reshape India’s legal approach to digital assets, the Madras High Court has ruled that cryptocurrency qualifies as “property” under Indian law, capable of being owned, transferred, and held in trust.

Delivering the verdict, Justice N. Anand Venkatesh observed that while cryptocurrency does not constitute physical or legal tender, it nonetheless represents an asset with measurable value and ownership rights. “There can be no doubt that cryptocurrency is a property… It is capable of being enjoyed and possessed in a beneficial form and can be held in trust,” the court noted.

Defining digital assets in legal terms

The ruling drew upon earlier Supreme Court decisions — including Ahmed G.H. Ariff vs. CWT and Jilubhai Nanbhai Khachar vs. State of Gujarat — to broaden the legal definition of “property” as encompassing all valuable rights and interests that contribute to wealth or estate. Justice Venkatesh further pointed out that cryptocurrencies fall within the ambit of “virtual digital assets” under Section 2(47A) of the Income Tax Act, 1961, and are therefore not speculative instruments.

The judgment arose from a petition filed by an investor whose 3,532 XRP coins on WazirX were frozen following a 2024 cyberattack. The court recognised her holdings as personal property and restricted interference with her assets until arbitration proceedings conclude.

Broader implications for India’s crypto framework

The court also referenced international precedents, including rulings from New Zealand, the UK, Singapore, and the United States, where cryptocurrencies have similarly been recognised as intangible property. Justice Venkatesh remarked that although digital tokens exist as “streams of 1s and 0s,” they hold real-world value and ownership attributes.

Significantly, the court urged Indian regulators to design a balanced framework that fosters innovation while protecting consumers and maintaining financial stability.

The judgment marks a crucial step toward providing legal clarity on cryptocurrency ownership, potentially influencing future decisions on taxation, inheritance, insolvency, and contractual disputes involving digital assets.